How Profiteers Lure Women Into Often-Unneeded Surgery

Jerri Plummer was at home in Arkansas, watching television with her three children, when a stranger called to warn that her life was in danger.

The caller identified herself only as Yolanda. She told Ms. Plummer that the vaginal mesh implant supporting her bladder was defective and needed to be removed. If Ms. Plummer didn’t act quickly, the caller urged, she might die.

Ms. Plummer, 49, didn’t ask many questions. Her implant was causing her discomfort, and she was impressed by how much Yolanda knew about her medical history. She was scared. “It was like I had a ticking time bomb inside of me,” she said. Yolanda assured Ms. Plummer that all her expenses would be covered and that she would be set up with a lawyer to help her sue the mesh manufacturer, Boston Scientific.

Days later, court records show, Ms. Plummer was lying on an operating table in a medical office in a shopping mall in Orlando, Fla.

Just like that, she had stumbled into a growing industry that makes money by coaxing women into having surgery — sometimes unnecessarily — so that they are more lucrative plaintiffs in lawsuits against medical device manufacturers.

Lawyers building such cases sometimes turn to marketing firms to drum up clients. The marketers turn to finance companies to provide high-interest loans to the clients that have to be repaid only if the clients receive money from the case. Those loans are then used to pay for surgery performed by doctors who are often lined up by the marketers.

Interviews with dozens of women, lawyers, finance executives and marketers, as well as a review of court records and confidential documents, indicate that hundreds, perhaps thousands, of women have been sucked into this assembly-line-like system. It is fueled by banks, private equity firms and hedge funds, which provide financial backing.

The profits are immense. So are the costs to women. Some suffer physical problems from the surgery. Others say they have become depressed or unable to work. Still others have to get mesh reinserted.

Ms. Plummer’s brush with the industry left her wearing diapers.

Faulty Products

The industry of providing financing to law firms involved in litigation is not new. In recent years, it has expanded into a diverse array of businesses. A spate of companies, such as a Brooklyn outfit named Law Cash, have popped up to provide upfront cash to plaintiffs hoping for big legal settlements.

The litigation surrounding mesh implants is a lucrative niche. These so-called mass tort cases, some of which began six years ago when problems with the implants started to arise, encompass claims brought by tens of thousands of women who say they were harmed by the same products.

Millions of women worldwide received mesh implants. They are used to correct a condition called pelvic organ prolapse, which occurs when a woman’s organs fall and press against her vagina because of weakened pelvic muscles. That causes urinary and other problems. The mesh reinforces the pelvic wall.

But many women complained that the implants caused problems such as bleeding and discomfort during sex.

Litigation against the implants’ manufacturers, including Boston Scientific and Johnson & Johnson, proliferated. There are more than 100,000 plaintiffs in federal court alone. Many more are involved in litigation at the state level or outside the United States.

Representatives of Boston Scientific and Johnson & Johnson said they stood by the quality of their products. The mesh manufacturers have set aside more than $3 billion to cover potential mesh-related settlements.

Not all plaintiffs are equal. Some law firms — which are paid a percentage of any settlements — realized that women with the implants still in their bodies tended to receive smaller settlements than those who had them taken out.

“Defendants have offered next to nothing to settle cases involving mesh products that have not been removed,” Ms. Plummer’s lawyers at McSweeney Langevin, a small Minneapolis personal injury firm, wrote in a letter advising her to get the implant taken out.

Rhett McSweeney, a co-founder of the law firm, said in a statement that the firm never forced clients to undergo unnecessary surgery and “never directed a client to a particular doctor.”

Plaintiffs’ firms turned to marketers to recruit clients. Women with mesh implants said they soon started receiving torrents of unsolicited phone calls, some originating overseas. The women said they didn’t know how these marketers had found them and seemed to know their medical histories.

“I think my privacy was breached,” said Jennifer Godsoe, 66, who lives in Cumberland, Me. “The more I think about it, the more upset I get.”

Some women had vague memories of answering an online ad about mesh problems. The only thing linking some other women was that they previously had the same doctors, court records show.

Women who took the marketing bait were connected to doctors willing to perform the mesh-removal surgery — although that process remains murky. One critical player was Surgical Assistance, a Florida company led by Wesley Blake Barber, which acted as a middleman between the women, doctors and funding companies. Mr. Barber’s lawyer declined to comment.

In a deposition last summer, Mr. Barber outlined how the company had lined up doctors in Florida and Georgia to perform the surgery. In one online ad, an actor in a white lab coat assures women suffering from their mesh implants that relief is near. By calling a toll-free number, the women will be set up with a “network of qualified surgeons” who remove the mesh without requiring upfront payments.

Women who opted for surgery were flown to Florida and Georgia, put up in motels and sent to walk-in clinics, court filings show. The women generally didn’t meet the doctors who would be operating on them until shortly before the procedure. Before going under the knife, few women got a second opinion.

Dan Christensen, a lawyer who ran MedStar Funding, which financed mesh removal surgery, said in an interview that it was “ludicrous” to argue that women had undergone unnecessary surgery.

“You have to have a doctor willing to put his license on the line,” he said. “Why jeopardize your license?”

$14,000 a Day

The work was lucrative. Doctors stood to make $14,000 a day.

Doctors sometimes churned through four or five removals in a day. Each procedure typically cost about $21,000, according to lawsuits brought by women against the mesh manufacturers. Of that, doctors pocketed roughly $3,500 per surgery; most of the rest went to the medical centers where the surgery took place.

Law Cash offered Danette Charnetzky, a hospice worker in Waynesburg, Ohio, financing for a removal surgery in December 2014. Ms. Charnetzky, another McSweeney client, agreed to pay the money back, at a double-digit interest rate, if the litigation was successful. Within a week, she and her husband were on a plane to a surgical center in a Florida strip mall. The process was a terrifying blur.

“I wish I could have changed my mind, but we were already there,” said Ms. Charnetzky, 49, who hasn’t received any money from the pending litigation against the mesh manufacturer. “I just prayed for the best.”

She got the worst — or something close to it. Ms. Charnetzky said she had needed two more procedures to repair scar tissue left by the Florida surgery.

Rhonda Espeland, 63, who was living in Arizona, also had a bad experience. Since her mesh implant was removed in January 2015, she has developed incontinence. “I may need another surgery,” she said.

The bladder problems have left Ms. Espeland unable to work, and she hasn’t received any money from litigation against her mesh manufacturer. Boxes of diapers are regularly delivered to her door.

The doctor who performed her surgery — and similar procedures on hundreds of others — was Earle M. Pescatore. In March 2014, around the time that he started doing lots of procedures, Mr. Pescatore and his wife filed for bankruptcy, citing liabilities of $1.5 million, including $38,000 they owed to the Internal Revenue Service, according to court filings. Dr. Pescatore said in a deposition that he had little memory of women he operated on.

“Any treatment that Dr. Pescatore provided would have been medically necessary,” his lawyer, Mark DiCowden, said.

While studies have shown that up to 15 percent of women with mesh implants will encounter problems, removing the mesh is not always recommended. Taking it out is more complicated than inserting it because the mesh is made of fiber that is designed to bond with tissue.

Many of the women who got the surgery had limited or no health insurance. They rarely discussed the surgery with their primary care physicians before arriving at the clinics. Some said they had felt rushed into getting surgery.

Dr. Victor Nitti, a surgeon specializing in complex pelvic issues at NYU Langone Health in New York, said serious mesh problems should be addressed with surgery. But, he said, “scaring a patient who has limited to no symptoms into removal is just dangerous and irresponsible.”

Dr. Nitti said he had grown concerned about such scare tactics after some patients told him that they had been contacted by marketers.

Funding Machine

A handful of specialized finance firms funded the surgery that Ms. Plummer, Ms. Espeland and other women got. Court filings show that the two main players are Law Cash and Banyan Finance of Boca Raton, Fla., and that the firms charge double-digit interest rates.

Ross Elgart, Banyan’s chief executive, did not respond to requests for comment.

Lew Fidler, Law Cash’s general counsel, said financing surgical procedures such as Ms. Plummer’s is a small portion of the company’s business. He said the firm, which typically provides cash advances to help plaintiffs pay for everyday expenses, ensures that each surgery is necessary.

“I feel for anyone who didn’t get the outcome they were looking for, but we are not doctors,” Mr. Fidler said. “We don’t substitute our judgment for a licensed physician.”

Law Cash, like other firms, is paid back for a surgical advance only if the person gets a settlement. The firms contend that high interest rates cover the risk that some borrowers will never collect settlements. Some women, however, said the high interest rates had never fully been explained to them.

As a result of those steep interest rates, plaintiffs who do collect settlements see much of the money go to the financing firms. Another large slice goes to their lawyers.

Medical funding for personal injury litigants was a topic of discussion Friday in Las Vegas at the mass tort industry’s big annual conference, titled “Mass Torts Made Perfect.” Law firms are eyeing mesh used to treat hernias as the next gold mine.

The industry has grown thanks in part to a gusher of money from mainstream financial institutions. Law Cash gets funding from DZ Bank, Germany’s second-largest bank, and Melody Capital Partners, a hedge fund with $1.8 billion in assets.

McSweeney Langevin, which has represented more than 1,000 women in mesh litigation, got backing from EJF Capital, a Virginia hedge fund with $10 billion in assets, according to corporate records.

Many of McSweeney’s clients initially were signed up by a now-defunct law and marketing firm, Alpha Law. The Washington firm had signed up 14,000 women for the mesh litigation. Its unusual role in the litigation was the subject of a series of Reuters articles.

The industry tries to keep the network of marketers and financiers out of sight — and some participants have refused to answer questions in depositions, citing their Fifth Amendment right against self-incrimination.

“People are claiming the Fifth and so on and so forth,” said Magistrate Judge Cheryl Eifert in West Virginia, who is hearing one of the mesh cases in federal court. “They don’t have to talk about necessarily how much money they make, per se, but if someone would just give them an idea of how the arrangement works. But nobody’s willing to do that.”

Mr. Barber of Surgical Assistance, for example, asserted the privilege nearly two dozen times in a deposition.

Swollen Like Balloons

Jerri Plummer never figured out whom Yolanda worked for. But in December 2014, Dr. Whitney Shoemaker performed the implant-removal surgery. Until the day of the operation, Ms. Plummer had never spoken to Dr. Shoemaker. Her lawyer declined to comment.

Hours after Ms. Plummer went under the scalpel, she said, she was hustled back to a Hampton Inn just off the freeway, with a catheter sticking out of her side. The next day, a nurse arrived at the motel, removed the catheter and put her in a taxi to the airport.

Soon after she arrived home in Arkansas, she said, complications developed. Her legs swelled like balloons. Her stomach seized up. Ms. Plummer went to her original doctor for help, she said. He informed her that the damage was irreversible. Worse, she said in court records, he told her that there had been no need for the removal surgery.

Before the surgery, Ms. Plummer loved to take walks with her two pit bulls and to eat with her husband at Red Lobster. Now chronic incontinence forces her to wear diapers all day and has left her too worried about wetting herself to venture outside.

With the help of a local lawyer, James R. Baxter, she is suing Law Cash; Dr. Shoemaker; Mr. Barber and his firm, Surgical Assistance; and lawyers at the McSweeney firm.

Mr. McSweeney declined to comment on the lawsuit. His firm is trying to get Ms. Plummer’s lawsuit moved from federal court into private arbitration, where there is no judge or jury. In his statement, he said the firm “had no role” connecting clients with surgical funders like Law Cash or Banyan Finance.

The law firm now has clients sign a waiver that advises them that cash advances to pay for surgery “are terrible loans with extremely high interest rates.”

Ms. Plummer said she had never received such a warning. She feels that she was victimized twice — first by the mesh manufacturer and then by her lawyers and doctor. “I was taken advantage of through this whole process,” she said.